Wall Street seen on the rebound, Europe declines with “tech” – 05/24/2024 at 1:38 p.m.

Wall Street seen on the rebound, Europe declines with “tech” – 05/24/2024 at 1:38 p.m.
Wall Street seen on the rebound, Europe declines with “tech” – 05/24/2024 at 1:38 p.m.

The Palais Brongniart, former Paris Stock Exchange

by Claude Chendjou

Wall Street should rebound slightly on Friday at the opening, while European stock markets consolidate mid-session amid doubts about the expected pace of monetary easing from the major central banks.

Futures on New York indices signal a rebound at the opening of Wall Street of 0.15% for the Dow Jones, 0.29% for the Standard & Poor’s 500 and 0.29% for the Nasdaq the day after A session in the red where indicators revived concern about the persistence of inflationary pressures in the United States.

In Europe, where the stock markets on the other hand benefited more from Nvidia’s forecasts and results on Thursday, notably with a sustained increase for the new technologies index on the Stoxx 600, the time has come to take profits.

In Paris, the CAC 40 fell 0.15% to 8,090.27 points around 11:10 GMT. In Frankfurt, the Dax fell by 0.35% and in London, the FTSE lost 0.40%.

The pan-European FTSEurofirst 300 index lost 0.47% and the EuroStoxx 50 in the euro zone lost 0.36%. The Stoxx 600 declined by 0.46%, mainly weighed down by the “tech” compartment (-0.79%).

Over the whole week, the CAC 40 is heading towards a decline of 0.96% and the Stoxx 600 towards a decline of 0.74%.

Data released Thursday in the United States showed a still strong labor market, while economic activity accelerated in May to its highest level in just over two years. In the euro zone, monthly PMIs showed activity at its fastest pace in a year in May, while wage growth in the currency bloc accelerated in the first quarter.

These statistics have given rise to a revision of rate cut expectations. Barclays estimates on Friday that the Bank of England (BoE) will reduce the cost of its borrowings only from August, while Danske Bank sees only two reductions in the cost of money in the euro zone this year, at instead of three initially.

“For the Fed, a rate cut in June has been planned for some time, but now even September seems quite questionable,” notes Joost van Leenders, investment strategist at Van Lanschot Kempen.

VALUES TO FOLLOW AT WALL STREET

Apple advances 0.5% in pre-market trading thanks to Wedbush raising its price target to $275, the intermediary seeing opportunities in AI for the iPhone manufacturer.

Nvidia shares, which climbed more than 9% on Thursday after the group’s results, gained another 0.5% in pre-market trading on Friday.

VALUES IN EUROPE

Renault takes 3.03%, the car manufacturer having announced a share buyback plan and UBS having raised its recommendation on the group from “sell” to “neutral”. Compagnie des Alpes jumped 7.46% after the group published an increased quarterly net result and an increase in its Ebitda outlook for the financial year.

The British energy network management group National Grid rebounded by 7.79% the day after a fall of more than 10% linked to the announcement of a fundraising of around 7 billion pounds.

RATES Eurozone sovereign yields are heading for their biggest weekly rise in a month in response to strong macroeconomic data.

The yield on the German Bund of the same maturity, however, was stable on Friday, at 2.585% after hitting a one-month high of 2.611% on Thursday.

That of ten-year US Treasury bonds is also practically unchanged, at 4.4728%, after strong tensions during the week.

CHANGES

The dollar is heading on Friday towards its strongest weekly increase (+0.6%) in a month and a half amid concerns about inflation in the United States. The note nevertheless fell by 0.16% during the session against a basket of reference currencies.

The euro advances by 0.19%, to 1.0834 dollars.

The pound sterling trades at 1.2717 dollars (+0.14%), ignoring the publication of an indicator showing that retail sales in the United Kingdom fell by 2.3% month on month in April .

OIL

Oil prices deepen their losses on Friday against a backdrop of high inflation prospects that could lead the Fed to keep rates at their current level for longer, which could dampen demand for crude.

Brent fell by 0.57% to $80.90 per barrel and American light crude (West Texas Intermediate, WTI) by 0.57% to $76.43.

The two oil benchmarks could show weekly declines of around 4% and 5% respectively.

(Writing by Claude Chendjou, edited by Kate Entringer)

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